Staying Connected on the Road

The growing telematics industry will keep you safe and informed when you're driving.

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The rational shopper keeps a car for a decade before buying a new one. Cars don't wear out before then, and most safety improvements have already been made. But if you appreciate cutting-edge technology, consider leasing, so that you can have the latest and the best every three or four years.

A case in point is telematics. I've driven several cars recently with built-in driver assistance systems, the best known of which is OnStar. Driver assistance systems are cellular-based and have embedded GPS connections; they can diagnose why the Check Engine light comes on, provide operator-assisted trip information, remotely unlock doors, call for help if an airbag deploys, and track down your car if it's stolen. They've been passably good in the past, they're better now, and they'll be really good in, say, 2007just about the time you'll be ready to turn over your leased car.

In 2000, when telematics was barely a $1-billion-a-year industry, analysts predicted it would grow to $40 billion a year by 2010. More realistically, it might be half of that. But that would still average $15 a month for every family in America.

The new reality recognizes buyer price resistance as you push down from Cadillacs and Jaguars to Saturns and Volkswagens. The cheapest service is still $15 a month. Fortunately, the cost of hardware is coming down to about $350 per car. Research shows that Americans like the safety features of telematics, Europeans are more concerned about navigation and trip-routing assistance, and the Japanese look for infotainment. Safety is a broad term here: For every emergency airbag notification that OnStar receives, it gets 40 sheepish calls from owners who locked their keys in their cars and 300 calls for directions.

The majority of the telematics cars I've driven used OnStar, which has 2.5 million subscribers. OnStar serves Acura, Audi, General Motors, Isuzu, Lexus, Subaru, and Volkswagen cars. It has simple, three-button controls: one for emergency help, one for nonemergency services (such as directions and traffic reports), and one for cellular calling.

Competitor ATX has about one-fifth the subscribers and is in BMW, Ford, Jaguar, Lincoln, and Mercedes cars. It's always branded by the car maker, though. For example, it's known as Mercedes TeleAid in Mercedes cars. ATX has similar emergency, assistance, and concierge services, plus the ability to swap service information with your dealership. In BMWs, where it's called BMW Assist, ATX calculates when you're due for a tune-up and sends the information to your dealer. This sort of customer relationship management (in business-school-speak) provides value to the automaker and reduces the cost of warranty repairs.

With either ATX or OnStar, you're connected to a pool of operators so friendly they must have been trained at Walt Disney World. For the most part, the information you get is accurate. At the same time, it may leave you wanting more. Why can't OnStar transfer trip directions to my car's pricey GPS display? Why can't I link my cell phone or PDA to the in-car electronics? (That ability is coming.) Why can't I use the cellular connection for concierge services on my ATX car? (That would require a second cell phone.)

There's progress, though. Voice recognition is getting better, with IBM making great strides in this area. Just this year, OnStar switched from analog-only to analog/digital service, an important change because the FCC might allow the analog cellular network to be shut down in 2008. OnStar is holding on to analog, because it has more range in nonurban areas, even though the voice quality is worse.

Telematics offers some big perks: In the future, you'll be able to check where your kids are and how fast they're driving, or negotiate a lower insurance rate if you don't use your car during prime drunk-driving hours. But there are potential downsides as well. To get that insurance discount, you'd have to prove your driving history with telematics. Do you really want Geico to know that much about your life?

The FBI recently tried to wiretap a suspect's telematics-equipped caressentially listening through his cell phone when he wasn't callingand couldn't get a warrant, because the method would have disabled his emergency capabilities. You have to hope the feds want to wiretap only the bad guys.

Bill Howard is the editor of TechnoRide.com, the car site for tech fans, and writes a column on car technology for PC Magazine each issue. He is also a contributing editor of PC Magazine.
Bill's articles on PCs, notebooks, and printers have been cited five times in the annual Computer Press Association Awards. He was named as one of the industry's ten most influential journalists from 1997 to 2000 by Marketing Computers and is a frequent commentator on TV news and business shows as well...
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